Hannu Kulju, Managing Partner for ESettlers, sheds some light into the work that he’s doing to grow the electric bus market in Europe.

Full Transcript:

Ben Lack:

I’m along with Hannu Kulju, the managing partner for Esettlers. Thanks so much for being with us.

Hannu Kulju:

Thank you very much.

Ben Lack:

What expertise are you bringing to the table when you consult? And what types of companies are you providing this expertise to?

Hannu Kulju:

The main company that I’m working for is the RD Net LTD and its product and process development company, and we focus on new technology innovations and our main customers are big Finnish industrial companies like Konecranes, Metso, and so we don’t do the order engineering designs for them, but we just focus on the high-technology product development.

Ben Lack:

Can you give us some detail on the clean-tech initiatives that you are working on?

Hannu Kulju:

We have been thinking different types of applications that we provide and mainly in the area of public transportation- that’s an interesting area- and and how to get buses to easily convert their diesel engines to electric engines and provide net-zero CO2 levels. It’s actually the business of conversion of existing diesel motors and diesel buses to electrical buses. It does not exist yet, and we made a market study on most of the car manufacturers, the bus manufacturers. They are not interested in that kind of business opportunity because they would like to sell new buses and the spare parts.

Ben Lack:

The conversion is really where you see the market opportunity?

Hannu Kulju:

It’s going to be a market opportunity because the penetration rate of electric buses is rather slow. If the average age of the bus fleet is around 10 to 12 years, so it takes quite a lot of time. Ten years to get real impacts to use fully electrical buses. It’s an opportunity and it is also that some of the bus manufacturers are interested to cooperate because we have competent package that is tailored: it includes the electric motor, it includes the balancing and charging system and dry management system links to the APS, and so same components could be used also in a fully electrical new bus.

Ben Lack:

Shed some light on that process. A company comes to you and says, I have a bus that I’m interested in converting into an electric bus, but I don’t know how to do it. Walk us through the steps of the different projects that ultimately cultivate into the full transformation of a nonelectric bus to electric bus. How long does that take? What are you really doing to electrify that bus?

Hannu Kulju:

We have couple of service operators in public traffic who are interested in this kind of conversion. First you take off the engine to get a box, gasoline tank, and some other components and you replace those with an electric motor. You link the electric motor to the suspensions and also to the other alignments of the platform. It’s rather simple. The bus looks outside like this, but it has 0 emissions and savings for the fleet owners. At least 50% of the costs in gasoline and maintenance are good savings for service operators.

Ben Lack:

What’s a typical return on investment for that type of conversion?

Hannu Kulju:

In Finland, a full diesel hybrid bus costs $300,000 Euros. If we do the motor installation, we take a bus year-model 2006, so the cost of that is less than $200,000. Of course, we need to do some renovation inside of the seats and all that, but the return on investment is pretty short; it’s less than five years.

Ben Lack:

The fleet manager could expect to have the conversion completed in how long? How long before it gets back into operation?

Hannu Kulju:

Actually, we take about half a year. Because the way that we do it is we have packaged the components. We have standard interphases, with the components. For example, in Nordic countries there is one major bus manufacturer a Swedish company. We also have some projects coming up in Romania and Sweden. It’s important from the service operator’s point of view because the public organization will do competitions for the companies who can get the public transportation licenses.

Ben Lack:

Do you also install the infrastructure at my service station, so that the bus can charge either an existing infrastructure in Finland, Romania, Sweden, that the buses can take advantage of and, if so, how much training is there to make sure that this bus is probably being maintained appropriately.

Hannu Kulju:

Charging of the buses is one of the most critical issues and it relates to the batteries. The technology for the batteries is developing all the time and the driving distance is the critical. If we take a diesel bus let say 12 meters long and do the conversion, and with a reasonable amount of batteries we can have a driving distance of 150 kilometers.If you use the bus for the morning traffic and evening traffic time, you are able to charge the bus during that time because not all the buses are not moving all day. If you have a bus that needs to be charged, then we have an option that we have energy warehouse, not energy storage but energy warehouse. We charge the batteries during the nighttime and then are able to do the charging during the daytime.

Ben Lack:

How long do these batteries last? Is that really the value here? You are going to get a bus to be able to go through a charge during a day, so there will not be that much concern in the middle of the day the bus is going to run out of power.

Hannu Kulju:

We have a good calculation for the batteries and if we take a bus that runs 120,000 kilometers per year, so the lifetime of the batteries is like six years.

Ben Lack:

Why does this industry interest you? Why are you doing what you are doing?

Hannu Kulju:

As an entrepreneur, you always have to look at the businesses that are growing and there’s an opportunity, and in this business, there is discontinuity of technology. Every time there is a discontinuity of technology, then you have an opportunity. It’s the same thing that there are probably new players in the game in the future who will take care of the charging.